Chapter Eleven

Issues for Review and Discussion

11-1. Why are companies such as Apple Inc. bringing cash back to the United States that prior to
2018 was kept in offshore banks? What impact is that having on the U.S. economy?
Companies such as Apple are bringing back cash to the United States because of lower tax
breaks. In pervious tax plans companies would have to pay higher tax rate when bring their
income back into the states. President Trump signed a new tax code, which had a positive impact
on the U.S economy because companies will now bring new job to the US market.
11-2. Discuss the climate for doing business in India. What are the implications for companies?
Some advantages for doing business in India is having a stable economy from some structural
and business reforms. They have a massive consumer market, where they have developed some
digital competitiveness. The businesses who will have the most success is IT, business that
outsource, software development and telecom. Some implications are how India offers highly
educated human capital base on their skills, knowledge and talent.
11-4. In what manner are firms investing or using “offshore cash” being brought back into the
United States?
Stock buybacks is where much of the money is being brought back to the states based on the
Federal Reserve. The year 2019 was the highest buyback ever recorded for their $1.1 trillion.
11-5. List four benefits and four drawbacks of reshoring.
Some benefits to reshoring:
 U.S. laws protect female and minority employees
 Reliable energy at low cost
 Excellent security to protect designs from overseas copycats
 Enable closer tabs on quality control and supply chains
 Excellent economy with consumers purchasing more
 Less shipment costs with consumers nearby
 Excellent human rights, education, legal, and political systems that promote freedom and
opportunity for citizens
 Capitalize on the new 21 percent corporate tax rate
Some drawbacks to reshoring:
 Market volatility
 Supply chain disruption
 Upfront investment
 Global competitiveness
 Skill Shortages
 Higher labor costs
 Infrastructure limitations
 Lack of sale
11-6. Describe the economic outlook for Indonesia.
Indonesia is a democratic Pacific archipelago comprised of thousands of islands, which currency
is called the rupiah. Their economy is fast growing in Asia, with their GDP has grown 5% in just
2017 alone. Indonesia is leading in exports because of its large and densely population areas.
Their natural biodiversity also leads them to be the second-highest world’s leader in abundant
natural resources because of their wilderness. They have also improved their economic and
social dimensions. The government have been closer to their people by having a young
population, a large domestic market, rich endowment of natural resources, low public debt, and
having a broad based and stable political system.
11-7. What country in Africa has the highest Internet penetration among all countries?
Morocco has the highest Internet penetration among all of the countries in Africa.
11-8. What areas of business does China seek superiority in within a decade?
The areas of business where China seek superiority in the next decade is AI, 5G, aerospace,
semiconductors, electric vehicles, and biotech. Their service sector counts for 52.8% of their
GDP, which is China’s largest economic sector.
11-9. What does the concept “daughterly guilt” mean with regard to the business culture in
India?
The concept of daughterly guilt is higher for women in India because they are expected to take
care of the children and their parents. Taking care of their elderly parent comes in later in life
when the women should be entering into top management roles.
11-10. Give specifics regarding the nature and role of “Union Membership across Europe.” What
are the strategic implications of these facts and figures?
The role of union memberships will protect and rise the wages of workers working in factories
and other companies. The strategic implications of the existence of labor unions are to aid in the
strategic decisions for local stores and companies in Europe. In most countries, the use of labor
unions has gone down over the years, while in Italy has increased.
11-11. Give specifics regarding income tax rates and practices across countries and associated
strategic implications.
Tax rates are important because they tell the company where to build their manufacturing
facilities or retail stores. They can even tell which companies to acquire during joint ventures.
Corporate tax rate will vary across countries and companies, which means companies will avoid
high corporate tax rate when investing in new factories.
11-12. Exports from the United States comprise about 13 percent of GDP, compared to about 45
percent of Germany’s GDP. What are the implications of this for U.S. firms doing business
globally?
The implication of the United States having a lower GDP then Germany’s GDP is that US is
exporting less products than Germany. The US is purchasing more goods then selling them
globally.
11-13. A company is planning to begin operations in Switzerland. That company’s EFE Matrix
includes 20 factors. How much weight (1.0 to 0.01) would you place on the corporate tax rate
factor? Discuss.
I would weight the corporate tax rate between 0.05 to 0.10. The reason being because high tax
rate will highly affect the strategic planning of corporations’ new buildings, factories, and stores.
11-14. Explain how awareness of business culture across countries can enhance strategy
implementation.
Being aware of business culture can enhance business strategy because having the knowledge of
the countries’ history, culture, and religious motivation, will give the business entering a new
market a better understanding of how to conduct business. This is one way a business can gain
and sustain a competitive advantage to other firm trying to enter the same developing market.
11-15. Describe the business culture in China.
Chinese people rarely do business with firms they don’t personally know. Knowing the
organizational chart is of highly importance in business relationships of other firms. Late arrivals
to meeting can negatively affect your relationship because it is considered an insult. Being
patient in meetings is important because of unexpected events or emergencies.
11-16. Describe the business culture in India.
The business culture in India is having great punctuality. Along with rather than disappointing
others, they will say something is not available or become a little vague. People from India
would rather do business with people who they established a relationship based on trust and
respect. They are not fans of saying no verbally or nonverbally. Business people from India do
not trust the government so the person’s word is enough to confirm an agreement.
11-17. Describe the business culture in Mexico.
Firms look for workers who are agreeable, respectful, and obedient, rather than innovative,
creative, and independent. Mexican employers are paternalistic and work with their workers.
Their workers are provided with more than a paycheck, but expect loyalty in return.
11-18. Describe the business culture in Japan.
The business culture in Japan is known as the Wa. They are known to be value loyalty and
consensus. To do business in Japan you need to maintain friendships and relationships. Sending
cards during birthdays and holidays are important. Along with knowing a person’s age and
status are very important since they respect their elders and are very important in a family unit.
The greeting in Japan is to bow and the deeper the bow the more respect you show. They are also
okay with handshaking but always give a little bow to show respect for their culture. Also,
exchanging the business cards is really important and they have to be in pristine condition with
one side translated to Japanese. They are also given with two hands and a slight bow.
11-19. Do some research on New Zealand to determine whether you agree that the country
merits its number 1 or 2 ranking globally in attractiveness for doing business.

New Zealand has a conducive economic climate because their GPD has growth over 3.3%. They
have maintained a great relationship with Asia Pacific. They have a straight forward legal
system, where registering and setting up paperwork for new business is simple to complete.
Their tax system is much more forgiving for small businesses, they give a 6.7% discount plus
rebates for partnerships. They also have a great work-life balance because they believe it will
help with productivity and the social connectivity. It ranks number 1 globally to start a business.
11-20. About 53 percent of people in Belgium are members of a labor union. Compare the labor
union situation across European countries and comment on the positive or negative impact this
factor has on attracting business investment into those countries.
Some negatives about having a labor union, would be protecting the wrong workers. It might
protect a bad worker vs a good worker. Companies might overwork workers working in the
service industry. Labor unions are great when protecting workers from working more then
normal hours, wages, safety in the workplace, benefits, and having work-life balance.
11-21. Explain why consumption patterns are becoming similar worldwide. What are the
strategic implications of this trend?
Globalization is the reason why consumption patterns are becoming more worldwide.
International trade, economic growth, and communication have allowed consumers to gain
access to new information, goods and services at a faster paced. Businesses have to adapt to
these changing trends by understanding consumer behavior and being open to cultural diversity
Entering new markets and setting yourself apart from your competitive will build up your
customers.
11-22. What are the major differences between domestic and multinational operations that affect
strategic management?
The major differences between would be that domestic operations will operate within the
country’s borders. While, international business will operate across national boundaries with
multiple markets, law, and cultural differences. The exchange rate is a risk international firms
will struggle, while domestic firms will not be affected by this risk. International businesses tend
to focus on having standardized products or services. While the domestic strategy, is to is to
tailor product and services to meet the unique needs to each local markets.
11-23. Why is globalization of industries a common factor today?
Globalization of industries have a common factor today because they can reduce operating costs
by moving abroad. They can buy cheaper raw materials, tariffs, and have access to new
consumers.
11-24. Compare the United States with foreign cultures in terms of doing business.
The business culture between the US and foreign cultures is that the US has a higher tolerance
for risk-taking in business, then foreign cultures. Europe is more risk-averse.
11-25. List six reasons that strategic management is more complex in a multinational firm.
1. More opportunities in globalized competition
2. Gaining market share growth
3. Resource allocation
4. More risks to plan for
5. Firms have to be more open to flexibility and adaptability
6. Firms have to follow local rules such as health and safety regulations
11-26. Do you feel that protectionism is good or bad for the world economy? Why?
I feel that protectionism is bad because it can lead to economic isolation. Increase in prices for
customer goods because of the lack in product differences and lack of competition.
11-27. Why are some industries more “global” than others? Discuss.
Companies such as oil, auto, and pharmaceutical depends on global resources and markets.
However, retail and accounting rely more on domestic markets because they understand and
don’t have to depend on the fast-changing markets. Other firms may depend on offshoring,
which can help countries have lower production costs.
11-28. Wa, guanxi, and inhwa are important management terms in Japan, China, and South
Korea, respectively. What would be analogous terms to describe U.S. management practices?
Wa= teamwork Guanxi= Social networking Inhwa=team building/retreats
11-29. Why do many Europeans find the notion of “team spirit” in a work environment difficult
to grasp?
Many Europeans find the notion as “team spirit” difficult to understand because in their cultural
norms, they value individualism. They prefer personal achievements over collective efforts.
11-30. In China, feng shui is important in business, whereas in Japan, nemaswashio is important.
What are analogous U.S. terms and practices?
Feng shui is harnessing natural forces. Nemaswashio is when workers are expecting to be alerted
of any issues in private instead of in the middle of a meeting.
Feng shui for the US would be installing fountains and hanging mirrors over their stoves.
Nemaswashio for the United States managers expect to be notified early about any soon to be
problem. They are more about avoiding the problem then having to come up with a solution.
11-31. Compare tax rates in the United States with other countries. What impact could these
differences have on “keeping jobs at home”?
United States have higher tax rates then other countries. However, if the United States lower
their prices, US companies will be bringing back their offshore jobs when it comes to
manufacturing. This will increase jobs in the US and grow their GDP and would be able to sell
more products then buy them from other countries, which will lower the debt the US has
incurred over the years.